Virtual Meetings and Increased Threshold for Winding Up to remain Law until 31 December 2023

Virtual Meetings and Increased Threshold for Winding Up to remain Law until 31 December 2023

The Minister for Trade Promotion, Company Regulation and Digital has announced the extension of the interim period of two temporary measures introduced by the Companies (Miscellaneous Provisions) (Covid 19) Act 2020 (the “Act”) to 31 December 2023 which will be of interest to company directors, shareholders and business owners.

The key measures, now in place until 31 December 2023 are the result of amendments to both the Companies Act 2014[i] and to the Industrial and Provident Societies Act 1893[ii] and are as follows:-

• Virtual Meetings: Companies and co-operative societies will retain the ability to hold virtual general and creditor meetings.
• Winding Up: the threshold for initiating a windup of a company has been increased to €50,000 for one single creditor claim and the same amount for claims by two or more creditors[iii].

Two other significant measures introduced by the Act[iv] have not been extended and consequently, the protection period offered by the examinership process may last no more than 100 days[v] and documents executed under seal by a company may no longer be executed in counterparts.

The Act was introduced on 21 August 2020[vi] as a response to the pandemic and specifically with the intent to act as a means of support to small and medium-size enterprises and to address critical issues such as potential company solvency arising from operational issues caused by the crisis.

We see the extension of the temporary measures as a positive development. By allowing corporate bodies to continue to hold meetings electronically it acts to ensure that those entities comply with their legal obligations. Virtual meetings aid companies in their governance and as a result it is expected that same will be provided for in the Companies Act 2014 on a permanent basis in the near future.

[i] Section 6 of the Act and section 14 of the Act

[ii] S. 28 of the Act

[iii] S. 14 of the Act

[iv] s. 13 of the Act (re length of protection offered by examinership process) and Section 5 of the Act (re execution by a company of documents by counterpart)

[v] S.520 of the Companies Act 2014 provides that the period of protection provided by examinership is 70 days from date of presentation of the petition. S. 534 of the Companies Act 2014 allows for an extension of that time period by a further 30 days where examiner unable to provide report within 70 days from presentation of the petition.

[vi] By Commencement Order S.I. No. 320/ 2020 – Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (Commencement) Order 2020